TY - JOUR
AU - Coile,Courtney C.
AU - Levine,Phillip B.
TI - Labor Market Shocks and Retirement: Do Government Programs Matter?
JF - National Bureau of Economic Research Working Paper Series
VL - No. 12559
PY - 2006
Y2 - October 2006
DO - 10.3386/w12559
UR - http://www.nber.org/papers/w12559
L1 - http://www.nber.org/papers/w12559.pdf
N1 - Author contact info:
Courtney Coile
Department of Economics
Wellesley College
106 Central Street
Wellesley, MA 02481
Tel: 781/283-2408
Fax: 781/283-2177
E-Mail: ccoile@wellesley.edu
Phillip B. Levine
Department of Economics
Wellesley College
106 Central Street
Wellesley, MA 02481
Tel: 781/283-2162
Fax: 781/283-2177
E-Mail: plevine@wellesley.edu
M3 - presented at "SI 2006 Aging Workshops", July 24-28, 2006
AB - This paper examines how unemployment affects retirement and whether the Unemployment Insurance (UI) system and Social Security (SS) system affect how older workers respond to labor market shocks. To do so, we use pooled cross-sectional data from the March Current Population Survey (CPS) as well as March CPS files matched between one year and the next and longitudinal data from the Health and Retirement Survey (HRS). We find that downturns in the labor market increase retirement transitions. The magnitude of this effect is comparable to that associated with moderate changes in financial incentives to retire and to the threat of a health shock to which older workers are exposed. Interestingly, retirements only increase in response to an economic downturn once workers become SS-eligible, suggesting that retirement benefits may help alleviate the income loss associated with a weak labor market. We also estimate the impact of UI generosity on retirement and find little consistent evidence of an effect. This suggests that in some ways SS may serve as a more effective form of unemployment insurance for older workers than UI.
ER -